Investing
Contributions at the start of the period
Moving every payment to the start of the period gives each one an extra period of growth, which multiplies the whole result by one plus the periodic return.
The Formula
FV(due) = FV(ordinary) x (1+r)
Moving every payment to the start of the period gives each one an extra period of growth, which multiplies the whole result by one plus the periodic return.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| FV(ordinary) | End-of-period value | currency | The result with payments at the period end. |
| r | Periodic return | percent | The return per period. |
| FV(due) | Start-of-period value | currency | The result with payments at the period start. |
What Each Symbol Means
FV(ordinary)currency
End-of-period value
The result with payments at the period end.
rpercent
Periodic return
The return per period.
FV(due)currency
Start-of-period value
The result with payments at the period start.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to dollar-cost average page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Dollar-Cost Average, filed under Finance. Every number the guide produces comes from substituting into this one line.